Does the All States M.E.D. franchisee acknowledge that the restrictive covenants are fair and reasonable?
All_States_M_E_D Franchise · 2024 FDDAnswer from 2024 FDD Document
Franchisee acknowledges that the restrictive covenants contained in this Section are essential elements of this Agreement, and that without their inclusion Franchisor would not have entered into this Agreement. Franchisee acknowledges that each of the terms stated here, including the restrictive covenants, is fair and reasonable and is reasonably required for the protection of Franchisor, the System and the Marks.
- 17.2.1 Franchisee acknowledges that the restrictive covenants contained in this Section and in Section 17 are fair and reasonable.
- 17.2.2 Except as otherwise approved in writing by Franchisor, neither Franchisee, nor any holder of a legal or beneficial interest in Franchisee, nor any officer, director, executive, manager or member of the professional staff of Franchisee, shall, for a period of two (2) years after the expiration or termination of this Agreement, regardless of the cause of termination, either directly or indirectly:
- (a) offer Competitive Business services located or operating (a) at or within a ninety (90) mile radius of the Franchised Business, or (b) within a ninety (90) mile radius of any other All States M.E.D. Business in existence at the time of termination or expiration, or (c) any other business owned or operated by the Franchisor in existence at the time of termination or expiration;
- (b) solicit or otherwise attempt to induce or influence any customer or other business associate of Franchisor to terminate or modify his, her or its business relationship with Franchisor or to compete against Franchisor; or
- (c) In furtherance of this Section, Franchisor has the right to require certain individuals to execute standard form nondisclosure or non-competition agreements in a form the same as or similar to the Nondisclosure and Non-Competition Agreement attached as Schedule 2.
Source: Item 23 — RECEIPTS (FDD pages 44–174)
What This Means (2024 FDD)
According to All States M.E.D.'s 2024 Franchise Disclosure Document, the franchisee acknowledges that the restrictive covenants are fair and reasonable. Specifically, the franchisee agrees that these covenants are essential to the agreement and reasonably required to protect All States M.E.D., its system, and its marks. This acknowledgement is a condition upon which All States M.E.D. enters into the franchise agreement.
This acknowledgement is further reinforced by the franchisee's agreement to certain post-termination covenants. The franchisee agrees that the restrictive covenants within the agreement are fair and reasonable. These covenants prevent the franchisee (and anyone with a legal or beneficial interest in the franchise) from engaging in competitive business activities within a 90-mile radius of the franchised business or any other All States M.E.D. location for a period of two years after the termination or expiration of the agreement.
Moreover, the franchisee is prohibited from soliciting or attempting to influence any customer or business associate of All States M.E.D. to terminate or modify their relationship with the company or to compete against it. All States M.E.D. also retains the right to require certain individuals associated with the franchisee to execute standard non-disclosure and non-competition agreements. These acknowledgements and agreements underscore the importance All States M.E.D. places on protecting its business interests and trade secrets, and the franchisee's commitment to upholding these protections.